2015 -- H 5798 AS AMENDED

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LC001954

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO TWIN RIVER CASINO GAMBLING

     

     Introduced By: Representatives O`Grady, Ackerman, Phillips, Casey, and Morin

     Date Introduced: March 05, 2015

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Unless otherwise amended by this act, the terms, conditions, provisions and

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definitions of Chapters 322 and 323 of the Public Laws of 2005 are hereby incorporated by

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reference and shall remain in full force and effect.

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     SECTION 2. Section 3 of Chapter 323 Chapters 322 and 323 of the Public Laws of 2005,

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as amended, entitled "An Act Enabling the Division of Lotteries to Enter into a Master Video

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Lottery Terminal Contract with UTGR, Inc. and to Enter into a Master Video Lottery Terminal

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Contract With Newport Grand Jai Alai, LLC" is hereby amended to read as follows:

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     SECTION 3. Authorized procurement of UTGR Master Contract

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     (a) Notwithstanding any provisions of the general laws or regulations adopted thereunder

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to the contrary, including, but not limited to, the provisions of Chapter 2 of Title 37 and Chapter

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61 of Title 42 of the General Laws, and the provisions of section 42-61.2-7, the division is hereby

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expressly authorized and empowered to enter into the master contract with UTGR for the term

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and for the following purposes, all of which shall be set forth in more particular detail in the

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master contract. The division is further authorized to approve the transfer of the video lottery

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retailer license held by Lincoln Park, Inc. to UTGR and:

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     (1) To license 4,752 video lottery terminals at Lincoln Park to UTGR during the term,

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including first the 3,002 existing authorized video lottery terminals, and replacements thereof

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from time to time, at Lincoln Park (herein, the “Existing Authorized Terminals”), and then 1,750

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additional video lottery terminals, and replacements thereof from time to time, as are hereby

 

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authorized for Lincoln Park (herein, the “Additional Authorized Terminals”);

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     (2) Subject to adjustment as provided herein, to fix in the master contract the allocation of

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net terminal income attributable to the Existing Authorized Terminals as follows:

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     (i) To UTGR when it shall become the licensed video lottery retailer: twenty-eight and

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eighty-five hundredths percent (28.85%);

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     (ii) The division shall have the authority to determine the placement and location of the

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Existing Authorized Terminals under the terms of this act and the master contract.

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      (3) Subject to adjustment as provided herein, to fix in the master contract the allocation

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of net terminal income attributable to the Additional Authorized Terminals as follows:

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     (i) To UTGR when it shall become the licensed video lottery retailer: twenty-six percent

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(26%);

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     (ii) The division shall have the authority to determine the placement and location of the

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Terminals under the terms of this act and the master contract.

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     (4) To provide in the master contract that the allocations set forth above in Section

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3(a)(2)(i) and Section 3(a)(3)(i) shall be calculated on a pro rata basis as follows:

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     (i) net terminal income x [(number of Existing Authorized Terminals in operation)/ total

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number of video lottery terminals in operation for the calculation period) x .2885; plus

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     (ii) (number of Additional Authorized Terminals in operation for the calculation period

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/total number of video lottery terminals in operation for the calculation period) x .2600].

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     (5) To include in the master contract all other terms and conditions appropriate to

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contracts of this type, as acceptable to the division.

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     (6) To establish an advisory committee (the “advisory committee”), the purpose of which

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shall be to consider and advocate programs and initiatives from time to time to benefit all

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constituencies with an interest in the continued economic success of Lincoln Park, and in

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particular, the recommendation of steps to coordinate the operation of Lincoln Park with the state

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and municipal agencies to maximize the efforts of joint marketing campaigns designed to benefit

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both Lincoln Park and other state-based businesses. The advisory committee shall meet quarterly,

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shall select from one of its members a chairperson and shall adopt by-laws to govern its meetings.

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The advisory committee shall consist of seven (7) members as follows: One (1) member

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representing UTGR or a UTGR business affiliate appointed by UTGR; one (1) member

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representing the town of Lincoln, Rhode Island, appointed by the Lincoln town administrator

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with the advice and consent of the Lincoln town council; one (1) member representing the Rhode

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Island Convention Center Authority, which may be either a member of the board of

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Commissioners or a designee appointed by the board; one (1) member representing the Greater

 

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Providence Chamber of Commerce appointed by that entity; one (1) member representing the

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Northern Rhode Island Chamber of Commerce appointed by that entity, one (1) member

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representing the Providence-Warwick Convention Visitors Bureau appointed by that entity, and

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one public member appointed by the governor.

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     (7) To provide for the following limitations on the use of Lincoln Park during the term:

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no hotel will be constructed or operated at Lincoln Park or by the then owner or operator of

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Lincoln Park (or their respective commonly controlled affiliates) in close proximity to the facility

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construction of a hotel at or in close proximity to Lincoln Park shall remain subject to all of the

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town of Lincoln's land use regulations and ordinances; and the facility will not be marketed as a

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venue for conventions or events of the type which are part of the target market for the Rhode

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Island convention center authority, the Providence Performing Arts Center, or the Veterans

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Memorial Auditorium, including Broadway or Broadway-type plays, or any theatrical

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performances of a musical, non-musical, or comedic variety (except that this limitation shall not

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prohibit the facility from being marketed to hold, and from holding, holiday fairs for local

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businesses, concerts, sporting and other entertainment events which are open generally to the

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public and if held in an indoor events venue at Lincoln Park, with no stage house, and with a non-

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fixed seating capacity of such venue not to exceed 1,500 people for musical concerts and comedy

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shows, and 2,100 people for all other events).

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     (8) To provide in the Master Contract for slippage protection as defined in Section 2(y).

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     (9) To provide in the Master Contract for adjustment in the blended rate during the

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eleventh through fifteenth years of the term as set forth in Section 5(b).

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     (b) Under the terms of the master contract authorized under this act, UTGR shall agree

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that during the term it shall undertake, among others, the following obligations:

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     (1) UTGR will invest, in the aggregate, within three (3) years following the effective date

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of the master contract in accordance with a schedule set forth in the master contract (but subject

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to an extension of the original three (3) year period as set forth in Section 3(c) below), at least one

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hundred twenty-five million dollars ($125,000,000) of total project costs, including “hard” and

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allowable “soft” costs (the “Lincoln Park investment requirement”), in connection with: (i)

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additions, renovations and/or improvements to Lincoln Park and to appurtenant real or personal

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property, including without limitation, improvements designed and constructed to provide access

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to Lincoln Park; and (ii) performing UTGR's obligations regarding investment requirements

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under the master contract (“Lincoln Park investment requirement assets”). "Hard costs” shall

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mean all costs that in accordance with United States generally accepted accounting principles

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(“GAAP”) are appropriately chargeable to the capital accounts of UTGR or would be so

 

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chargeable either with an election by UTGR or but for the election of UTGR to expense the

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amount of the item, and “soft costs” shall mean all other costs appropriately chargeable to the

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investment requirement which are not hard costs in accordance with GAAP. In determining

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whether the investment requirement has been satisfied, soft costs in excess of ten million dollars

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($10,000,000) shall be excluded. Provided further, that none of the expenditures in this subsection

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shall qualify as eligible expenditures for purposes of any credit, including historic tax credits as

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provided in chapter 44-33.2 and enterprise zone credits as provided in chapter 42-64-3.

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     (2) On or before the dates set forth in the master contract and in all events on that date

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which is 90 days after the third anniversary of the effective date of the master contract (as such

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original three (3) year period may have been extended as set forth in Section 3(c) below), UTGR

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shall submit to the division UTGR's certification, certified by a certified public accounting firm

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acceptable to the division and using procedures approved by the division not inconsistent with

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GAAP, providing its professional opinion, on behalf of itself and its applicable UTGR business

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affiliates as to the aggregate amounts expended, allocated between “hard” and allowable “soft”

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costs in respect of the investment requirement, so as to enable the division to measure UTGR's

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investment requirement assets and to confirm UTGR's compliance with its obligation under

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Section 3(b)(1) hereof. UTGR shall pay all costs of obtaining and preparing the professional

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opinion obtained from the certified public accounting firm required by this subsection; and

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     (c) The master contract shall also provide, without limitation, that the division shall be

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entitled to, among other things, terminate the master contract if UTGR fails to fulfill the

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aggregate investment requirement pursuant to Section 3(b)(1) hereof prior to that date which is

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three (3) years from the effective date of the master contract, unless such failure is attributable to:

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     (i) the failure to receive the necessary local approvals in connection with the

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improvements, construction and other activities referenced in Section 3(b)(1), notwithstanding the

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use of UTGR's commercially reasonable efforts to obtain such approval; (ii) delays attendant to

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any litigation brought by any third-party contesting in any way the construction of the

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improvements and having the effect of delaying the expenditure of the investment requirement

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and which litigation is ultimately resolved in a manner allowing the expenditure of the investment

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requirement to proceed; or (iii) the occurrence of one or more force majeure events beyond the

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control of UTGR. The aforesaid original three (3) year period shall be extended by the number of

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days delay occurring as a result of any one or more of the events described in clauses (i), (ii) or

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(iii) of the preceding sentence.

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     (d) The master contract shall also provide that, following completion of the investment

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requirement, UTGR shall maintain Lincoln Park in a manner substantially consistent with first

 

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class racinos operated elsewhere in the United States pursuant to regulations adopted by the

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division and approved by the permanent joint committee on state lottery.

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     SECTION 3. Definitions. For purposes of this act, the following term shall have the

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following meaning: "UTGR Master Contract" means that certain Master Video Lottery Terminal

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Contract made as of July 18, 2005 by and between the Division, the State of Rhode Island

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Department of Transportation, and UTGR, as amended from time to time.

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     SECTION 4. Authorized Procurement of Fourth Amendment to the UTGR Master

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Contract. Notwithstanding any provision of the general or Public Laws to the contrary, the

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Division is hereby expressly authorized and directed to enter into with UTGR a Fourth

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Amendment to the UTGR Master Contract to make the UTGR Master Contract consistent with

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the provisions of this act, as follows:

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     (1) To remove the prohibition on the construction or operation of a hotel at or in close

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proximity to Lincoln Park;

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     (2) To permit the construction and operation of a hotel at or in close proximity to Lincoln

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Park; and

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     (3) To provide that construction of a hotel at or in close proximity to Lincoln Park shall

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remain subject to all of the town of Lincoln's land use regulations and ordinances.

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     SECTION 5. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TWIN RIVER CASINO GAMBLING

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     This act would remove the provision in the public laws of 2005 which prohibits the

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construction of a hotel on the Twin River premises in Lincoln, Rhode Island, and permits the

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Division of Lotteries to enter into an amendment to the Master Contract to remove such

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prohibition.

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     This act would take effect upon passage.

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